The ransomware against Change Healthcare/UnitedHealth has brought the issue of payer redundancy top of mind. Unpaid insurance claims may top $1 billion by the end of March, with hundreds of healthcare companies still reeling from the effects.
As one of the largest clearinghouses in America, Change Healthcare processes nearly 50% of all medical claims in the US. So when their systems went down without warning on February 21, thousands of professionals woke up to a nasty realization: they were unable to submit insurance claims for reimbursement.
Change Healthcare expects to restore system functionality no later than the end of March — although the repercussions are far from over for patients and physicians. Some healthcare providers are losing more than $100 million per day, with others taking on debt to stem the bleed.
But what if more companies had payer redundancy?
Could widespread adoption have mitigated these effects?
To answer these questions, let’s take a step back.
What Is Payer Redundancy?
Payer redundancy means creating multiple methods of submitting insurance claims to clearinghouses for payment. This means rather than relying on a single clearinghouse, a healthcare company instead submits transactions to multiple entities.
Most companies achieve payer redundancy by combining modern architecture with software solutions. Depending on the scale or solution in question, it may occur in several stages:
- Establish eligibility
- Submit claims
- Validate and acknowledge claims
- Manage Electronic Remittance Advice (ERA)
- Produce custom reports (such as raw EDI files)
The ultimate goal of payer redundancy is to eliminate payer risk. By decentralizing communications and duplicating submitted transactions, the impact of outages and cyberattacks becomes somewhat less harrowing.
A Case Study In Payer Redundancy
Healthcare companies used payer redundancy to great effect during the acute stages of the Change Healthcare hack.
Universal Health Services was one such organization, relying on innovative solutions to ensure a seamless claims submission process.
Technology redundancies and vendor relationships proved invaluable during the first few weeks of outages. The organization was able to pivot effectively and find a better position to weather the storm.
CFO Steve Filton encourages other healthcare systems to ensure “a greater level of redundancy among all these applications.”
“… It just makes sense that in a lot of these applications, we don’t have a single user, single source vendor, just in case something like this arises.”
The Possible Impact Of Payer Redundancy On The Change Healthcare Hack
Universal Health Services was not the only organization to use payer redundancy during the Change Health crisis. Thousands of others, unfortunately, did not — resulting in nationwide catastrophe.
If hospitals and clinics were able to send transactions through multiple clearinghouses, the Change Healthcare hack may not have been as disastrous.
Payer redundancy would have enabled organizations to:
- Avoid outages
- Pivot quickly
- Submit claims effectively
- Maintain cash flow
- Meet debt covenants
While payer redundancy is by no means a perfect solution, it’s a powerful tool for navigating the era of cyberattacks. Working with tools that connect to multiple clearinghouses help you not just survive, but thrive during outages.
Source: Orbit Healthcare
